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Last week’s oral arguments: in Plain English

Last week, I wrote about several fascinating oral arguments at the Court.  As Dahlia Lithwick commented with her signature dry humor,  some of this week’s arguments were dense and technical.  On the other hand, the Justices also heard arguments about the immigration status of children born outside the U.S. to a U.S. citizen, whether medical residents are “students” for purposes of payroll taxes, and the interaction of copyright law and the “gray market” for products purchased abroad.

First up this week was Mayo Foundation for Medical Education and Research v. United States, in which the Justices were asked to decide whether medical residents are “students” for purposes of the Federal Insurance Contributions Act (FICA) (in which case they would not be required to pay Social Security taxes) or instead employees (and therefore required to pay the taxes).  If – as the hospitals in the case contend – the residents are students, then hospitals also save money because they do not have to pay into the government retirement program for them.  The government, on the other hand, counters that the residents are employees rather than students, and both sides have arguments in their favor:  the hospitals emphasize that the residents are still learning to be doctors and would not be allowed to practice in the hospitals without supervision, while the government argues that they earn full-time salaries and work full-time schedules.  In short, FICA’s definition of the word “student” may be ambiguous, meaning that the Court will be the final arbiter on the question of just what it means.

Sounds simple, right?  Don’t we know a student when we see one (to borrow a turn of phrase from Justice Potter Stewart)?  Well, maybe not.  As I have discussed in prior Plain English posts, the Court uses any number of “tools” to interpret statutory terms.  Here, with the word “student,” the Court will look to the “plain meaning” of the word (if there is one) – what do ordinary people understand a “student” to be?  But if the plain meaning does not help the Justices decide the issue, they will try to determine what Congress thought a “student” was.  Whom did Congress intend to exempt from FICA taxes?  The Justices will also consider the agency definition – should they defer to what the Treasury Department thought that “students” were?  The implications will be far reaching, as there are thousands of medical residents working in American hospitals today.

On to a very different type of case, this one about naturalization and U.S. citizenship.  The petitioner in the case, Ruben Flores-Villar, was born in Mexico to unmarried parents, only one of whom – his father – is a U.S. citizen.  Under the law in effect when he was born, if Flores-Villar’s mother had been a U.S. citizen, he could have become a U.S. citizen as long as his mother had lived in the U.S. for at least one year before her baby’s birth.  However, because his father was the U.S. citizen, Flores-Villar could obtain U.S. citizenship only if his father had lived in the U.S. for ten years, five of which came after his fourteenth birthday – a requirement that was physically impossible because his father was only sixteen when Flores-Villar was born.  Without U.S. citizenship, Flores-Villar was deported for committing a crime and charged with being present in the United States illegally when he tried to return.

In his case before the Court, Flores-Villar makes what is called an equal protection claim, arguing that the federal immigration law applying to his situation treats the child of an unwed U.S. citizen father differently.  He also explains that, no matter what level of scrutiny the Court applies to the law, he should win because the government has no legitimate basis for treating men differently than women.

Let’s take a quick look at the concept of “scrutiny.”  Just as it sounds, when the Court is considering a claim that the Constitution has been violated, it uses different tests depending on the type of case before it.  Some kinds of cases – such as those claiming race discrimination by the government or government interference with free speech – require the Court to use “strict scrutiny,” which considers whether the discrimination is “necessary” and the state’s interest is “compelling.”  Obviously, this standard is hard for the government to meet, unlike “rational basis” review (applying to most types of government action), which only requires that a violation is “rationally related” to a “legitimate” state interest.  For cases involving government gender discrimination or discrimination against the children of unwed parents, the Court uses “intermediate” scrutiny, which asks whether the difference in treatment is “important” to a “substantial government interest.”  Here, Flores-Villar claims that he should win no matter which standard properly applies; the Court will have to decide both which level of scrutiny is appropriate and whether the INA survives that scrutiny.

But even if Flores-Villar has convinced the Court that the law governing citizenship for the children of unwed parents is unconstitutional, it appears that he still faces a big problem:  at the oral argument, most Justices seemed to think that the Court did not have the power to remedy the problem and grant him citizenship, because that power properly belongs to Congress.  Stay tuned for the answer, one which will be particularly important and relevant in this modern world where parents may be married (or not) and citizens of the same country (or not).

In another case this week, AT&T v. Concepcion, the Court considered whether companies can be required to submit to arbitration with a class of plaintiffs, rather than with individual plaintiffs.    A “class action” is a lawsuit brought by a large group of people, all of whom have suffered the same injury.  Rather than bringing separate lawsuits, they join together to bring one big lawsuit, and all members of the class agree that they will accept the same outcome.  They may choose to join a class because the amount of money that each individual is seeking is small, making it impractical to find an attorney and sue on their own, or because they cannot afford to retain an attorney on their own in the first place.

“Arbitration” is an alternative means of dispute resolution that avoids the court system and allows specially trained experts – known as arbitrators – to resolve disputes.  Arbitration is usually cheaper and faster than litigation in court, and many contracts contain clauses requiring parties to resolve their differences through arbitration.  In fact, even federal law prefers arbitration as a neater, cleaner way of solving problems than traditional lawsuits.

But the wrinkle arises when class actions and arbitration come together.  In this case, AT&T’s cell phone contracts contained a provision prohibiting plaintiffs from bringing class actions; instead, AT&T customers were required to bring individual claims.  The state court called that provision “unconscionable,” which means that it was invalid because it was so unfair.  Now the Court must answer several questions:  Does a federal law that was intended to ensure that arbitration agreements be enforced trump, or “preempt,” the state court decision?  Should the Concepcions, who were forced to pay sales tax on a “free” phone, be allowed to join in a class action to recover the thirty dollars that AT&T fraudulently charged them?  And if their class action can go forward, does it adversely affect arbitration?  Finally, what exactly is a 9,000-foot cow, what does it have to do with cell phones, and why did Justice Breyer ask about it in the oral argument?  The Court will tell us the answers to at least some of these and other hard questions by June.

In one more case, Costco Wholesale Corp. v. Omega S.A., the Court is considering the “first-sale” doctrine, an exception to copyright protection that says that the holder of a copyrighted product is only entitled to profit from the “first sale” of the product.  Subsequent sales, such as between wholesalers and retailers, would not be protected under copyright law.  The doctrine would allow U.S. discounters to offer bargain prices on goods made by foreign manufacturers and bought overseas, then imported.  The cases arises because Costco sold Omega watches at a discounted price in its U.S. stores, incurring the wrath of Omega, who stood to gain little if anything from Costco’s sale of its products.  Costco points out that, if the first-sale doctrine does not apply to this situation, foreign manufacturers will have a leg up over domestic ones, to whom the doctrine applies.

Next week, the Court could issue the first signed opinion of the Term. . .  and I’ll explain it in Plain English.

Recommended Citation: Lisa Tucker, Last week’s oral arguments: in Plain English, SCOTUSblog (Nov. 13, 2010, 10:43 PM),